A subcommittee of the Senate has been trying to determine the reasons –and the possibly remedy– for the state Medicaid department’s huge deficit. It’s a shortfall called “unprecedented” by the agency’s new director, Tony Keck.
Senator Tom Davis serves on the five-member panel looking into the HHS $225 million deficit. He says they have found two major reasons:
On the front end, the General Assembly funded HHS at about $92 million less than it said it needed in order to run the program in a solvent way. In addition to that $92 million of underfunding the Senate also took $90 million, an addition $90 million out of HHS’s reserve account.
That’s $182 million that the agency says it needed to operate and to comply with federal mandates, according to agency testimony when they set last year’s budget.
Compounding that problem, says Davis, is the proviso by the General Assembly limiting how the agency can cut costs. A bill to cancel that proviso is in the legislature now, supported by Davis and the Senate:
You’ve got three things that drive costs in Medicaid: It’s the size of the population that you’re serving, the number of people in the program, its the types of services that you provide to that population and it’s the reimbursement or payments that you make to the providers of that services, like doctors and hospitals and nursing homes. And the General Assembly in the budget through provisos has mandated the services that HHS has to provide.
The Beaufort senator says his panel is also looking ahead to determine how to keep a $225 agency deficit from happening again. One solution is a bill to be filed by Senator Vincent Sheheen.
Davis says the HHS deficit subcommittee’s work is almost done. He is hopeful the panel will get a bill passed this year.